Snap plummeted by 39% while shares in Meta fell by 7.6%, and Google’s parent company, Alphabet, has also dropped by 13% since March 2020.
The US social-media giants have seen more than $130 billion wiped off their stock-market values on Friday. It is thought Snap’s plummeting stock was due to disappointing revenue. Similarly, Twitter had a disappointing quarterly report which raised new concerns about the outlook for online advertising, paired with acquisition woes now that Elon Musk is trying to withdraw from the deal to buy Twitter.
With the downward turn from the social media giants, one must ask why. We are all still frequently using social media and companies are still advertising. So, what has changed?
It has been suggested that the slump is due to a slowdown in advertising revenue. However, it has to be noted that the dark horse of the crowd, Tiktok, is not seeing similar patterns and continues to show growth.
Snap responded to the results saying that the revenue for the period is flat with the same period last year. It also said that it plans to substantially reduce the rate of hiring.
Have the tides turned for our Tech Giants? We will have to take a wait and see approach.